Better Place in bid to raise $300M

Founder of electric vehicle initiative, Shai Agassi, leading Europe and US road show for commercial launch of initiative slated for 2012. Additionally, Better Place planning private bond placement in Israel to raise NIS 400-500 million

Golan Hazani, Calcalist|Published: 08.03.11 , 13:59

Better Place, the electric vehicle (EV) initiative, has initiated a financing round in a bid to raise an additional $300-350 million. Calcalist has learned that since last week, Better Place Global CEO Shai Agassi has been leading a road show for institutional investors in Europe and the US.

The round comes ahead of the commercial launch of the EV initiative slated for early 2012. At the same time, Better Place is endeavoring to raise some NIS 400-500 million ($120-150 million) in a private bond placement in Israel, for which it held in the beginning of the month a presentation for institutional investors.

Startling Prediction

Promoter of electric cars sees global change

Associated Press

Before 2020, Shai Agassi believes, more people everywhere will be buying electric cars than those powered by gasoline. 'Israel will become the first country in the world to put 100,000 all-electric cars on the road,' he says

Promoter of electric cars sees global change

So far, Better Place has raised an overall $700 million through three separate rounds with the current round aiming to drive up raised capital to one billion dollars.

Calcalist has also learned that currently, Better Place is conducting a trial run for hundreds of EVs around the world and is finalizing preparations to deploy its charge-spot network in Canberra, Australia, scheduled for this year.

Hiking value

Better Place's last round was on January 2010 in which the company raised $350 million of which the company's Israel operations, under the control of Idan Ofer, invested $72 million increasing its stake to 30%.

Last winter's financing round was based on a $1.25 billion market cap and estimates are that the current round will probably reflect a higher market cap – at least $1.5 billion.

The previous placement was underwritten by HSBC investment bank which paid $125 million for 10% of the company shares. Additional investors in that round were Morgan Stanley Investment Management, Lazard Asset Management and the company's original investors – Israeli investors and California-based VantagePoint Venture Partners.

The funds raised in the previous rounds as those from the current placement are earmarked for research and development, completion of an infrastructure deployment in Israel and Denmark and the expansion of the company's activity in the US, Australia and Europe.

Shai Agassi founded the initiative at a $200 million investment. From the onset, its largest investor was Idan Ofer through Israel Corporation.

The company's business model is based on the drive to find solutions to global warming and the need for alternatives to oil. Better Place faces the challenge of getting drivers to leave behind traditional combustion engines – a technology used for the past century – as well as gaining support from the world's leading car makers.

First to partner up with Better Place was Renault, which agreed to produce cars with easily replaceable batteries.

Network in Denmark and Israel

Last May, Better Place stated that an electric car would cost Israeli consumers NIS 123,000 ($36,050) and that the car can be purchased from the manufacturer whereas the chargeable batteries – from Better Place.

Since the batteries last for only about 160 kilometers (99 miles) and charging lasts for five hours, users will need battery exchange points in addition to charging points. So far, servicing networks have been deployed in Israel and Denmark.

Calcalist has learned that the road show is expected to last three weeks and an announcement about the financing round is expected by late August or early September.